DevoManc is positive for all Northern cities

Should the Government’s new devolution settlement for Greater Manchester be welcomed? Ed Cox – who is set to speak in Manchester this Thursday about the regions – offers a clear ‘Yes’ vote.

There can be little doubt that the agreement reached between the Chancellor and the leaders of the 10 local authorities that make up Greater Manchester represents a step-change for English devolution.

Over the past two decades we have seen incremental changes – such as targeted regeneration pots passed downwards and City Deals struck with the core cities – but these have been piecemeal and too often lacked the full support of the Treasury to constitute a genuinely cross-government approach.

In the weeks since the Scottish referendum, there have been favourable noises about English devolution. This has turned into something of a beauty contest between the parties about how much cash might be put into economic development funds.

But the agreement reached for Greater Manchester is bigger and bolder than anything that has gone before. Much as in London, it involves taking on powers over significant housing investment, spatial planning and transport. It also means the new elected mayor takes over the responsibilities of the fairly recently created role of the Police and Crime Commissioner.

The mayor of Greater Manchester is likely to get even more powers than the London Mayor with the promise of control over its health and social care budget, skills, apprenticeships, business support and UK Trade & Investment functions, and a co-commissioning role for the Work Programme.

Where the deal falls short of what Manchester and many other devolutionists have argued for is in terms of fiscal powers. Confirmation of Manchester’s ‘earnback’ model is a small step in the right direction, as the city region will keep up to £30 million per annum of the proceeds of growth. But the difference between English cities and their international counterparts is that the English cities continue to depend upon central government handouts and delegated pots for more than 85% of their cash.

The Manchester deal barely changes this and leaves it vulnerable to revocation. In countries such as Germany, Sweden and Japan, central government contributes less than 30% of city budgets, giving cities much greater autonomy. Fiscal devolution is fundamental to any long-term power shift and much will depend upon on-going trust and growing local accountability.

Many commentators have noted that it is only three years since the people of the city of Manchester rejected a “City Mayor” and now they apparently will have a directly-elected mayor imposed upon them without a referendum. There is some ignorance in such comparisons.

The devolution package on the table is now much more tangible and residents of Greater Manchester – not just the city – will quite rightly want a say in how the multi-billion pound package will be administered. Furthermore, Manchester has come up with a metro mayoral model that involves direct election, but at the same time retains significant powers of veto for the elected local authority leaders.

This is arguably a much better model than in London with its additional tier of GLA members and the expensive City Hall. Given that the mayor will replace the Police and Crime Commissioner, Manchester has created a new model without creating a single extra politician.

Business leaders have reacted positively to the announcement and residents are likely to follow suit. The public appetite for devolution is growing with a recent IPPR/PwC survey showing that 82% of the public believe that central-local relations need to be changed.

This mood has been galvanised by events in Scotland and the turnout at public meetings on devolution in the city has ballooned in recent weeks. That is not to say that the deal won’t cause discontent. The photographs of 11 white, ageing men doting on the Chancellor will raise suspicions and eyebrows, which one hopes will lead to a much more diverse range of candidates to stand for election – both in their newly powerful councils and for the mayoral role itself.

The Manchester deal also opens the question as to whether such incentives will be on the table for other northern cities. Will those cities be able to put past disputes to one side to keep up with their noisy neighbours?

The answer is undoubtedly yes. Both central and local capacity constraints will inhibit rapid progress, but there can be no doubt that the English devolution genie is well and truly out of the bottle.

Ed Cox will be speaking as part of Policy@Manchester’s Policy Week in a debate on London versus the Rest: can Northern cities compete?, Thursday 6 November, 6.30pm at the Nowgen Centre. Further details here.

About Ed Cox

Ed Cox is Director of IPPR North. Before joining IPPR in 2009, Ed was Policy Adviser to the Secretary of State for Communities and Local Government, where he played an important role in shaping the Sub-National Review, the Empowerment white paper and other policy themes. In previous roles, Ed has been Director of Policy and Public Affairs at the Local Government Information Unit and served as a Commissioner on the Government’s Commission on Integration and Cohesion.